Ritchie Shareholders Approve $6 Billion IAA Takeover
[Stay on top of transportation news: Get TTNews in your inbox.]
Shareholders of Ritchie Bros. Auctioneers Inc. approved the company’s plan to acquire IAA Inc., ending a battle by some investment funds to block the $6 billion deal.
Ritchie rose 0.2% to $54.60. IAA was up 1.7% to $40.84 as of 12 p.m. on March 14 in New York, compressing the deal spread to less than 65 cents.
Ritchie, a Canadian firm that sells heavy equipment at auctions around North America, struck an agreement in November to buy IAA, which sells damaged and written-off vehicles. The deal has been controversial from the start, with some Ritchie shareholders saying the company is making a mistake by diversifying into the auto-salvage business.
CEO Ann Fandozzi and the board sought to win over skeptical investors by recasting the deal in January with more cash and less stock, bringing in Jeffrey Smith’s Starboard Value for a $500 million capital infusion.
But that didn’t stop Ritchie from facing a proxy fight to stop the deal, led by major shareholder Luxor Capital Group, which argued the company is taking on too much financial and execution risk to buy an inferior business.
“We thank our shareholders for their confidence in the Ritchie Bros. team, our strategy and the significant value creation potential we can unlock through the Ritchie Bros. and IAA combination,” Fandozzi said in a statement.
Earlier in March, two influential proxy advisory firms, ISS and Glass Lewis, recommended that Ritchie shareholders vote against the takeover. David Ritchie, the company’s co-founder, also came out against the deal, saying it risks negatively impacting the culture of the company.
Want more news? Listen to today's daily briefing below or go here for more info: